Monday, February 28, 2011

The sales process is a series of steps towards a mutual commitment--the contract. But you're not likely to get there unless there are incremental commitments between buyer and seller along the way. That's simple logic, but a surprising amount of sales pursuits in our profession languish in limbo because we fail to climb what I call the "Commitment Ladder."

The Commitment Ladder is a sequence of increasingly greater commitments between two parties leading to the ultimate desired level of commitment. It's much like courtship, where commitment to each other grows as trust and mutual benefit increases. Ask for too much commitment too early in the relationship and you're likely to be rebuffed, if not dropped. But ask for too little commitment and you risk not developing the relationship at all.

Technical service sellers are more prone to the latter shortcoming. Certainly I was earlier in my career. I worked hard to serve the client, to maintain regular contact, to build affinity. But I was often lax in asking for a reciprocal level of commitment on the client's part, and I often got burned because of that omission.

I thought I was building relationships, but effective relationships require mutuality. Too often I was the only party investing anything of significance in the relationship. It may seem productive for a while, but it rarely results in making the sale. I see many technical professionals in sales roles today making the same mistakes I did.

So let me encourage you, if you have responsibilities in sales, to take the following steps in climbing the Commitment Ladder:

Determine in advance of each sales call what you'd like to ask the client to do. One of the smartest things I ever did when I was in business development was to develop the discipline of planning every sales call: What did I need to learn? What questions would I ask? What should the next steps be following the call? That last question included: What commitment did I want to seek from the client to confirm mutual interest in advancing the relationship? Don't avoid asking such questions routinely; they enable you to better gauge how well you're really doing with the client.

Ask for increasingly greater commitments over time. Getting to know the client better over the course of several sales calls is a good thing, but not nearly good enough. You want to gradually gain the client's trust and commitment. With each subsequent meeting, you should seek evidence of that growing mutual commitment. For example, early in the process, you might be seeking introductions, follow-up meetings, increasingly detailed information about the client's needs. Later, as the relationship developments, you might ask for things like an extended strategy meeting, a visit to your office, or a trip to another client's facility that is relevant to this client's needs. Increasing commitments signal progress in the relationship.

Move quickly to schedule commitments. The best time to schedule the next meeting with the client is the current meeting. Whatever request the client may agree to in terms of future actions, it's best to get it scheduled immediately if you can. I've had clients make such commitments in the past without getting the appointment right away, only to find it nearly impossible to later get it on the calendar. Haven't you? Here's a general rule I advise for your sales calls: Always determine the next step and get it scheduled before closing the meeting.

Don't be afraid to hear no. I've mentioned the importance of seeking evidence of mutual interest in the relationship. But the opposite result is equally valuable. If the client is not interested in doing business with you, it's best to discern that early (remember, he's not likely to tell you that, so you're seeking signals that will show you). This allows you to redirect that time to other, more promising prospects. If you're not actively asking for commitments (i.e., climbing the Commitment Ladder), you can waste a lot of time and energy on clients who are only interested in adding you as another "bidder." Or taking advantage of the free information and advice you're offering.

One of the main reasons we don't ask for more commitments, I'm convinced, is the fear of being rejected. Sometimes we get too emotionally invested in trying to win over a particular client who has never shown any real mutual interest. Don't get fooled. Your time is too valuable to waste. Rigorously seek mutual commitments from prospective clients as a way to test and validate the state of the relationship. Both parties benefit when the truth is revealed earlier rather than later.

Friday, February 18, 2011

A/E firms like to tout their client service as a key selling point. But clients aren't buying it. In a survey conducted by the consulting firm Morrissey-Goodale, only 16% of clients gave their A/E service providers an "A" grade for service. A couple of other surveys found that only a fourth of clients would recommend their top service providers, while almost two-thirds are open to switching providers.

So there would seem to be a ripe opportunity for firms to distinguish themselves in a tough economy. Yet surprisingly, by my own informal poll, only one in four firms have a regular process for gathering client feedback. Isn't that necessary to ensure you're providing excellent service?

In a previous post, I outlined an effective strategy for getting feedback. It's not that difficult. But if your firm is serious about it, you should at least investigate the advantages of the Client Feedback Tool created specifically for our industry by DesignFacilitator. It makes the task even easier, plus adds functionality to the feedback you collect that can help you better cultivate your client relationships, improve your delivery process, and evaluate your staff and project teams.

Recently, I got together over the phone with Ryan Suydam, DesignFacilitator's Director of Operations, to compare notes on the topic of client service and feedback. Here are some of the things we talked about:

Feedback supports better service. This would appear obvious, but Ryan had an interesting finding to back this up: Among firms using the Client Feedback Tool, 24% of responses included at least one score below "Met Expectations." In looking at subsequent responses from those same clients, the occurrence of scores below "Met Expectations" declined by 83%. We can assume those firms took some kind of corrective action in response to the low scores. But it makes you wonder: How many of those firms would not have even known there was a problem if they weren't collecting feedback?

Client satisfaction varies at different stages of the project. The results of over 3,500 surveys performed with the Client Feedback Tool reveals some trends in client satisfaction over the course of a project. Average scores vary significantly by phase: Proposal (4.57), programming (5.19), schematic design (5.33), construction documents (4.80), bidding (4.82), construction administration (4.76), furnishings (6.10), end of project (5.21).

So clients grow more satisfied as the design concept takes shape, but their enthusiasm declines as the details (and costs) are defined. They are least satisfied during construction, but most pleased as furnishings are selected and delivered. Overall, they tend to be happier at the end of the project than at the beginning, which is what we'd hope.

Knowing this can help design firms adjust their level of engagement with the client to account for those phases (notably construction) when problems are more likely. But, of course, it would be even better to have client-specific, project-specific feedback to guide your responsiveness.

Benchmarking client service scores in our industry is still a bit challenging. Unlike the financial and operational data coming from PSMJ and ZweigWhite, there seems to be little correlation among the limited client surveys available. DesignFacilitator and Morrissey-Goodale offer the only substantial client service data I've found for our industry. They use different scales for measuring satisfaction, as do I in the client surveys I conduct. But even making general comparisons is difficult.

For example, responsiveness has the highest average score among six service categories in DesignFacilitator's survey results. Almost 29% of respondents gave it top scores. But only 19% of clients in Morrissey Goodale's survey gave an "A" grade for responsiveness. Their survey measured 13 service factors. There are similar incongruences in trying to compare other aspects of the two sets of survey results.

Timing can make a difference. DesignFacilitator found that response rates are best when invitations are sent mid-morning, and on Wednesdays. The differences, in fact, can be quite substantial compared to other times of the day and other weekdays. This probably matters little if you're not using their tool, but it raises the question whether this might apply to soliciting other types of responses from clients. Try it and see.

Reminders significantly improve your response rate. DesignFacilitator found that sending reminders increased the response rate by 23%. But other studies have seen response rates double by sending a reminder. Bottom line: Always send reminders to clients who are slow to respond.

Ryan shares other interesting findings from the data they compile with the Client Feedback Tool on the DesignFacilitator blog. Check it out for another take on this important topic of serving clients well and confirming it through effective feedback.

Saturday, February 12, 2011

Does your firm have explicit core values? A purpose or mission statement? Can you identify the distinguishing features of your corporate culture? Do you have a compelling vision for the future? Does it really matter?

Chances are you can answer yes to most or all of the above questions, although honesty may force you to hedge a bit on the last one. How many technical professionals would consider such matters as key to their firm's success? They might even be inclined to agree with the cartoon character Dilbert who once defined core values as "a type of emotional illusion common to children, idiots, and non-engineers."

The lack of enthusiasm for core values, purpose statements, and vision statements is understandable. While most firms have articulated these, most don't really act on them. You might find them hanging on the wall or tucked away in a planning document, but you may be hard pressed to see them consistently expressed in the way the firm conducts business.

So why bother? Perhaps it's because we know the best companies all have them. But having these things is hardly the point; living them is. And it's true that companies with strong cultures, shared values, a clear sense of purpose, and inspiring goals vastly outperform those that merely go through the motions.

Why This Matters

There is abundant proof that companies that build their businesses on these "strategic foundations" enjoy substantially better financial results. Probably the best known study in this area was conducted by Harvard Business School professors Kotter and Heskett, who tracked the performance of several companies over an 11-year period. The ones with "high performing cultures," as measured by the well-tested Organizational Culture Inventory (OCI), delivered remarkably better bottom-line outcomes: 4x higher revenues, 8x greater staff growth, 12x higher stock prices, and 700x better profit!

Among the characteristics that Kotter and Heskett found in the top performing cultures were: strong shared values, high integrity, members who actively support each other, entrepreneurial drive, concerted effort to maintain the culture and pass it on to newcomers, and leadership that produces change. How many of those traits does your firm have? Honestly.

Other academic studies and one recently completed by McKinsey & Company reached similar conclusions. Strong cultures--which are largely shaped by values, purpose, and vision--deliver tangible results that even the Dilberts in our midst can appreciate.

Testing Your Foundations

So if by chance your firm hasn't taken the steps to define your strategic foundations, let me urge you to do so. It's not fluff, not merely an academic or philosophical exercise. It's practical wisdom. And in this economy, can you afford to ignore what has worked for hundreds of the best-performing companies?

For the majority of firms that have at least identified their values, purpose, and vision, the operative question--to be blunt--is: So what? Has it really made a difference in how you operate? Is it "top of mind" in your external and internal interactions, decision making, standard practices, and policies? If not, or if you think you could do better, let me recommend putting your foundations to the test.

One suggestion: I recently worked with a firm where we conducted a virtual "cultural archeological dig" exercise. Participants imagined themselves as outside observers, looking for manifestations of their firm's true culture and values. The basic premise of this exercise is that your firm's culture and values are not what you espouse them to be, but what is expressed in tangible, observable ways. Such an exercise can deliver some surprising results.

For example, this firm found lacking solid proof of their formal values. A recent client survey, for example, produced middling scores for two of their values--"quality" and "creativity." While the overall scores for service were good, the group decided they weren't good enough to merit another of their values: "superior service." They found other evidence that one of their purported strengths, their distinctive culture, was eroding in the face of rapid growth and organizational changes.

What might your firm find? Below are some other questions to consider as you take a closer look:

Regarding your culture:

Is our culture the product of intentional design and effort? Can our employees describe its distinctive attributes?

Do we measure, or at least informally track, certain important aspects of our culture?

Is cultural fit a key criterion in our hiring decisions?

Do we have a process for integrating new employees into our culture?

Have we been deliberate in establishing key dimensions of our culture in branch offices?

Regarding your core values:

Do we routinely reference our values in all aspects of our business?

Do all our employees know what our values are?

Do we tolerate the deliberate violation of our values? Are there consequences?

Do we have any standard practices, policies, or structures that are not consistent with our values?

Regarding your purpose or mission:

Is our purpose statement brief, memorable, and compelling?

Are all our employees familiar with it? Do they find it inspiring?

Does it capture the essence of why our firm exists?

Is it evident in our operational priorities?

Does it both support growth and constrain our choices?

Regarding your vision:

Do we find this exciting? Does it guide our strategy?

Is it clear, compelling, and easy to remember?

Does it connect to our core purpose?

Is it a stretch but still achievable?

Will we know when we've achieved it? Is it measurable in some way?

These are a few questions to get you started. The important things to look for are (1) authenticity and (2) impact. If you find either of these qualities lacking, it's time to rethink your strategic foundations. Perhaps you need to better align your business practices with what you espouse. Or perhaps you need to ask: Who are we really? What does the evidence suggest? Maybe your strategic foundations need to arise from there.

Take a closer look. You might be surprised what you find, like my client. But whether you discover something new or simply confirm what you thought, you'll be wiser for getting to know your firm better.

Monday, February 7, 2011

It's down to two. The client asks that your project team come in for the shortlist interview, which is supposed to include a 30-minute presentation. In particular, they want to hear from your lead engineer Joe Bore, who has distinct expertise in this kind of project.

Oh no, not Joe! He's a great engineer but he looks painfully uncomfortable when asked to speak before a group. What should you do?

All of us who have been around this business for a while have faced this problem to some degree. Many very capable technical professionals do not perform well in a formal presentation. Yet they can be crucial to the team's success in a shortlist interview. At this stage of the process, clients are looking for comfort and chemistry with the people who will have important roles on their projects. If one of those key people comes across as stiff and uninteresting, it can kill your firm's chances of winning the job.

Consider the following tactics:

Forget the monologue, dialogue instead. Ever listened to your proposed project team discussing strategy in preparation for a shortlist interview and thought, "If only the client could be here right now. We'd win this job. Our guys really understand this project"? Unfortunately, that confidence and competence doesn't always translate to the presentation itself. Formal speaking roles pull some individuals out of their comfort zone, making them look weak even when discussing a subject where they are particularly strong.

One tactic to ease the discomfort is to engage the client in a dialogue as part of your presentation. Insert questions at specific points in your talk to get some conversation going. This helps create a more informal, less threatening atmosphere, which better positions your teammates to show their best stuff. This requires some careful facilitation, because you don't want to ignore the client's request for a presentation. But done properly, this can be a very effective approach (over 80% of the teams I've coached to use this tactic the last decade have been successful).

Interview your awkward teammate. Another twist on the dialogue method is to ask the Joe Bore on your team specific questions instead of having him give a prepared talk. The presentation leader, rather than giving the floor to Joe, simply asks him a series of questions that have been rehearsed in advance. Joe may not even need to leave his seat. I like this approach to involving team members even when there isn't a problem presenter involved because multiple speakers can disrupt the flow of your presentation.

Don't just talk, do something. Even a polished presentation and splashy graphics don't necessarily convey the image of a firm that can get things done. Consider working in a more "hands-on" approach, especially for the Joe on your team. For example, have him sketch a rough process diagram or write some other information on a sketch pad as he discusses it. Bring a set of plans for a similar project that he can reference. Many reluctant speakers do well with such activities because they're more like a routine project meeting. Plus I think these tactics often can better portray your expert's ability than working from prepared slides or graphics.

Prepare for the toughest questions. It's always a good idea to anticipate the most difficult questions the client might ask and plan your answers in advance. I've witnessed several interview teams go down in flames when they stumbled over such a question. Even if you can't produce a great answer, your ease in addressing the question can impress the client. Besides the answer, be sure to plan who on the team will respond if the question arises.

Practice, practice, practice. In my experience, most firms in this business practice too little for important shortlist interviews. I find it interesting that firms can spend ten times as much time on a proposal with long odds as they do on an interview once the field has been narrowed to a few. Practice helps everyone, but especially the ones who are least comfortable with presentations. Usually it's best to have at least three dress rehearsals, more if things aren't coming together as well as they should. Focus on the presentation (with dialogue), but don't ignore practicing your answers to tough questions.

Here's where I differ from most presentation coaches: The primary goal should not be a polished presentation, but reaching the point where your team appears comfortable, competent, and authentic. Even an error-free presentation can come across as phony (like some stage acting). The team will connect with the client better when they seem genuine. And for the Joe on your team, this is especially important.

So it's usually best to avoid trying to "coach up" your weak presenters to handle speaking roles, if you can. Instead, create a presentation and interview structure in which they can show their strengths, not expose their weaknesses. Each Joe will be different, but the goal is the same: Put him in a role where he can show his best.